High power costs, graft hurting industrial growth, manufacturers warn

The Kenya Association of Manufacturers (KAM) has called for urgent national and county government reforms to address structural bottlenecks that continue to undermine industrial growth across the country.

Industry leaders warned that expensive energy, corruption, and slow licensing procedures severely weaken the competitiveness of locally produced goods.

Speaking at a three-day shopping festival in Mombasa, KAM Chief Executive Officer Tobias Alando stated that Kenya possesses immense potential to become a regional manufacturing powerhouse if these deep-rooted challenges are resolved.

Alando specifically pointed to the high cost of electricity as one of the most severe constraints facing local enterprises today.

He noted that expensive power keeps eroding the ability of domestic firms to compete effectively against foreign imports in both local and international markets.

The industry umbrella body wants the state to introduce special electricity tariffs tailored specifically for industries to ease the financial burden on factories.

“We have opportunities in this country to impact the world through manufacturing positively, but we must address corruption, reduce production costs and create an enabling business environment,” Alando said.

The exhibition brought together diverse producers, buyers, and investors to promote locally made goods while serving as a direct policy advocacy platform.

Participants urged authorities to streamline the current licensing procedures and improve aging transport infrastructure to lower overall operational costs.

The manufacturers also demanded the immediate removal of non-tariff barriers and the harmonization of conflicting county government regulations.

They argued that inconsistent rules between different counties create massive logistical inefficiencies and artificially increase the cost of doing business.

KAM Coast Region Chairman Abdalla Athman explained that unreliable utilities and persistent traffic congestion around major port areas make Kenyan exports less attractive.

Athman noted that delays in cargo movement and severe infrastructure bottlenecks continue to hurt operational efficiency in Mombasa, which serves as a critical regional logistics hub.

In response to these concerns, Mombasa Governor Abdulswamad Nassir stated that the county administration is actively working with various stakeholders to resolve the logistical blockages.

Nassir revealed that joint efforts are underway with the Kenya Ports Authority (KPA) to improve cargo handling efficiency and significantly ease gridlock within the coastal city.

The governor announced that plans are being finalized to establish a dedicated marshalling yard to streamline heavy commercial truck operations.

Furthermore, the county intends to introduce modern electronic traffic management systems to improve vehicle movement around industrial zones.

Local manufacturers have previously linked high consumer power bills to deep-seated corruption and inefficiencies at Kenya Power, where middlemen inflate the cost of electricity transmission.

The industrial sector has consistently lobbied for stable and predictable tax policies to protect manufacturing enterprises from sudden operational shocks.

Industrialists maintain that reducing the regulatory burden and ensuring affordable, reliable energy remain the most critical steps to expanding domestic production and creating sustainable employment.